Labour force participation rises

Since about the turn of the millennium, the labour-force participation rate, or the share of American civilians over the age of 16 who are working or looking for a job, has dropped pretty dramatically, with an acceleration in that drop after the 2008 financial crisis and the ensuing Great Recession.

The Council of Economic Advisers found that the other half of the drop in labour-force participation came from cyclical factors tied to the Great Recession. In addition to the normal falloff in participation seen in other recessions, the depth and severity of the Great Recession pushed millions of Americans to the sidelines, discouraging them from even looking for work.

In recent months, the labour-force participation rate has mostly ticked up, possibly indicating a tightening labour market as people who were previously discouraged from looking for work move back into the labour market, although the rate did fall in April and May.

According to the June jobs report, the labour force participation rate rose slightly to 62.7% from 62.6% in May.

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